Binary Options Trading Strategies

Feb. 16, 2013 1:28 PM ET
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Contributor Since 2013

I'm Kevin, owner and author of Recently binary options are becoming very popular and that is understandable because it gives traders possibility to gain profit in very short period of time. I've been involved in this industry for more than 2 years now and I can say that I understand this topic pretty good and I made a lot or mistakes during these years. I want to share them with you and explain how to avoid them.

Trading binary options is not difficult but it doesn't mean that traders don't have to learn the basics and follow the market situation to gain stable and regular profit. Usually people don't look for trading strategies and help from aside when everything goes smooth but when something goes wrong it is a whole lot different story.

We all want to gain profit from our investments and to do it we need to understand more to be one step ahead.

There are many binary options trading strategies but I'll introduce you to the most popular.

  • Picking To Win - you should start with this one. It gives binary option trader the main information about the market and helps to avoid overpaying for your investments. I.e.. if most brokers do not take any commission for your trades, some might take them and why would you engage with a broker who "steal a penny" from you every time you make a trade if usually it doesn't happen. Also you might want to take a closer look on related assets. Lets say that you decide to invest in Apple because it is likely to grow. You might also want to look at index S&P 500 because these two are related.
  • The Reversal - this strategy is something similar to gambling so it is important not to use large amounts. If you're not absolutely new to trading then you might have seen situations when suddenly stock prices grow or fall. I'm talking about significant changes. When such things happen you might buy the opposite option because usually after such changes market will stabilize a bit by moving to the opposite direction.
  • Knock-on Effect - with this strategy large amounts matter because trader is making bets on both directions. Basically buying and selling an asset at the same time, that is why large amounts is so important.

If you decide that you could make money by trading stocks, currencies, indexes or commodities. Don't be lazy and learn some strategies. Believe me, you won't regret that later.

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